Commodity market report
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40 Pages

China coal markets long-term outlook H1 2015

China coal markets long-term outlook H1 2015

Report summary

Slowing economic growth and its decoupling from energy demand have considerably weakened coal demand. Thermal coal demand in 2014 contracted for the first time since 1998 while metallurgical coal demand remained flat. Chinese miners are battling for survival in the current low price environment; nearly 80% of thermal coal mines and 35% of metallurgical coal mines are cash negative. Absent underlying demand improvement or supply rationalization, a recovery in coal prices looks a distant dream.

What's included?

This report includes 5 file(s)

  • China coal markets long-term outlook H1 2015 PDF - 1.22 MB 40 Pages, 8 Tables, 35 Figures
  • 02 CMS China Coal Prices data.xls XLS - 378.00 KB
  • 03 CMS China Coal Demand data.xls XLS - 1.98 MB
  • 04 CMS China Coal Supply data.xls XLS - 269.50 KB
  • 05 CMS China Coal Infrastructure data.xls XLS - 1.96 MB


Global coal markets are facing extraordinary challenges and uncertainties. Factors such as global overcapacity, weakening demand and falling prices have created cautious investors. These factors have caused delays and cancellations of many mine and infrastructure projects, as well as lower growth rates at others.

This Thermal Coal Market Long Term Outlook report gives global and regional coal producers, consumers, transporters and investors detailed supply, demand and price forecasts for the coal industry, covering all the key domestic markets in North America, China and India.

Use this report to gain a better understanding of market dynamics, including revenue and demand potential for different coals. It will also help you identify trade patterns and changes affecting the thermal coal markets.

Wood Mackenzie is the only coal industry service provider that offers a market outlook integrated with other sector analyses, including macroeconomics, coal supply, steel markets and gas and power markets. Our coal analysts are based in the markets they analyse. They work with objective, proprietary data to help you maximise your current and future investments.

From market dynamics to trade patterns, we give you confidence in your strategic planning.

  • Executive summary
    • Key themes
      • Government policies are not solving China's oversupplied market
      • Environmental policies: targets emerge, but detail is sparse
      • Power reform in early stages, but could be a further drag on coal long term
    • Changes from the previous outlook
  • Economic outlook
  • Prices
    • Prices and politics usher in deflation, with recovery around 2020
    • Domestic thermal coal price forecast
    • Domestic hard coking coal price forecast
    • Seaborne thermal coal price forecast
    • Seaborne metallurgical coal price forecast
  • Demand
    • Thermal summary
      • Thermal coal demand - regional analysis
      • Coastal region
      • Central region
      • North region
      • Northeast region
      • West region
    • Metallurgical summary
      • A weak property market pushes demand lower
    • Environment and market forces pressure metallurgical coal demand
      • There will be consecutive new demand for seaborne metallurgical coal from two projects
      • Metallurgical coal demand in China expected to peak in 2023
    • Metallurgical coal demand – regional analysis
      • North region
      • North-east region
      • Coastal region
      • Central region
      • West region
  • Supply
    • Thermal coal supply
    • Metallurgic coal supply
  • Infrastructure
    • Railroads
      • Weak coal demand will lower rail capacity utilization
    • Power transmission
    • Ports
  • Trade
    • Thermal coal
    • Metallurgical coal
  • Supply-demand balances
  • Risks and uncertainties
    • Coal vs environment: majority of risks point to downside for coal demand
      • Carbon emission reduction plans may evolve faster than in our base case
      • Renewables penetration and UHV transmission expansion in power markets
      • Coal quality as a problem and reshaping the future in an ultra-low emissions world
      • The trade-off between fears of nuclear plant development and increased coal consumption is hard to assess
    • Government intervention, and the pace and scale of market reforms
      • China may take drastic steps to insulate its domestic industry from coal imports
      • Traditional relationships between economic growth and power generation may be changing: the rate at which emerging economies decouple economic growth from electricity generation may be different than we forecast
      • Continual cost deflation: advances in equipment utilisation, extended diesel downside, further productivity gains, technological improvement

In this report there are 43 tables or charts, including:

  • Executive summary
    • Domestic thermal coal margin curve (FOB Newcastle, US$61/t)
    • Domestic metallurgical coal margin curve (FOB Queensland US$106/t)
    • Supply-side initiatives: coal quality standards for domestic consumption
    • Thermal coal demand in coastal China and seaborne imports (Mt)
    • China coal supply demand balance (Mt)
    • Thermal coal demand - power sector (Mt)
    • Thermal coal demand - non-power sector (Mt)
    • Domestic thermal coal supply (Mt)
    • Seaborne thermal coal imports (Mt)
  • Economic outlook
    • Economic indicators
  • Prices
    • Domestic spot price vs long-term contract (RMB/t)
    • Market discount to FOB QHD (after energy adjustment)
    • Domestic coal prices, RMB/t - history (nominal) and forecast (real 2015)
    • Seaborne thermal coal price forecast (US$/t, Real 2015)
    • Seaborne metallurgical coal price forecast (US$/t, Real 2015)
  • Demand
    • Installed capacity by fuel type (GW)
    • Power generation by fuel type (TWh)
    • Total thermal coal demand (Mt)
    • Thermal coal demand - non-power sector (Mt)
    • China's five regions
    • Thermal coal demand by region (Mt)
    • Power coal demand by region (Mt)
    • Non-power coal demand by region (Mt)
    • Demand: Image 8
    • Demand: Image 9
    • Demand: Image 10
    • Demand: Image 11
  • Supply
    • Thermal coal production by province, Mt
    • Thermal coal seaborne imports by country and rank, Mt
    • Thermal coal landborne imports by country, Mt
    • Metallurgical coal production by province , Mt
    • Metallurgical coal imports by country, Mt
    • Metallurgical coal imports by rank, Mt
  • Infrastructure
    • Transport cost estimates to move coal from Ordos to QHD for private miners (RMB/t)
    • Railway capacity expansion from Three-west region and Xinjiang, 2014-2020 (Mt)
    • Forecast of railed coal to import regions by groups (Mt)
    • Power transmission import by region and power source (TWh)
    • Forecast loading port capacity in north China (Mt)
  • Trade
    • 2014 thermal coal trade flows (Mt)
    • 2014 metallurgical coal trade flows (Mt)
  • Supply-demand balances
    • Thermal supply demand balance, Mt
    • Metallurgical supply demand balance, Mt
  • Risks and uncertainties
    • Risks assessment, H1 2015
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